OCBC strategists Sim Moh Siong and Christopher Wong report a technical rebound in USD/TWD, linking it to broader US Dollar strength and risk aversion tied to a US-Iran ceasefire stalemate.
They describe the move as a short-term squeeze, consistent with a falling wedge pattern that can point to a near-term bullish reversal. USD/TWD was last at 31.57.
Key Levels And Technical Setup
They set resistance at 31.60 (100-day moving average) and 31.75 (21- and 50-day moving averages). They set support at 31.40/45, 31.20 (2026 low), then 30.90 (200-day moving average).
They still prefer selling into rallies. They cite foreign inflows into Taiwanese equities, plus a renewed link to the tech cycle, with the TWD-TWSE 30-day rolling correlation above 0.90.
They add that if geopolitical tensions ease and the US Dollar weakens, the Taiwan Dollar may strengthen. They also point to strong AI-led export momentum.
The article was produced with the help of an AI tool and reviewed by an editor.
Positioning And Macro Drivers
The recent uptick in the USD/TWD is a short-term squeeze, pushed by a stronger US dollar and general market caution over the US-Iran situation. Markets are now only pricing a 40% chance of a Federal Reserve rate cut in June, which is keeping the dollar elevated for now. This technical rebound was expected and presents an opportunity.
Despite the current strength, we favor selling into this rally. Key resistance levels to watch for selling opportunities are around the 100-day moving average at 31.60 and further up near 31.75. The fundamental story for a stronger Taiwan Dollar remains intact, so derivative traders can look to sell call options or establish bearish positions at these levels.
The underlying support for the TWD is incredibly strong, as seen by the high correlation between the currency and the Taiwan Stock Exchange. Taiwan’s Financial Supervisory Commission just confirmed net foreign inflows surpassed $15 billion in the first quarter of 2026. This trend highlights how global capital is chasing Taiwan’s tech leadership.
This capital flow is justified by the booming AI-led export cycle. Fresh data from the Ministry of Finance showed Taiwan’s exports of electronic components surged 22% year-over-year in March 2026. This powerful momentum, driven by global AI demand, will eventually pull the TWD stronger.
We saw a similar dynamic throughout the second half of 2025, where the TWD strengthened each time geopolitical fears eased. Therefore, traders should consider using options to position for a stronger TWD over the next few months. This allows them to capitalize once the current risk aversion subsides and the dollar’s broad strength fades.
